Who are the foreign buyers in Portugal?

Despite other parts of Europe seeing a decline in house prices, Portugal experienced a growth of 5.5% in 2023, however, prices are expected to decline steadily during 2024 and 2025. This is likely due to the changes in the Golden Visa scheme and the introduction of the AL (Alojamento Local) tourist rental licence.

Whilst not a major expected decrease, this will make investing in Portugal even more affordable in the next couple of years.

One of the drivers of this growth has been foreign buyers, boosted by Portugal’s growing tourist industry and the potential for seasonal rentals. In addition, Portugal is an attractive destination to move to, and has become an alternative to its neighbour Spain.

Ranking number 7 on the Global Peace Index, Portugal is considered a safe country to live in, which is another reason it lures foreign buyers.

Approximately 10% of the population of Portugal were born abroad, which equals about 1.7 million residents. Due to the strong connections, 30% of these people are Brazilians. In 2012 there were ‘only’ 1.2 million foreigners living in Portugal. This increase represents the country’s attractiveness as a place to live.

However, it is not just the Brazilians that buy property in Portugal. In addition to the UK, property buyers in Portugal come from the USA, Germany, France, Sweden, Switzerland and the Netherlands. Something noticeable is that the Chinese are also beginning to buy Portuguese property.

According to a report by INE – the Institute of National Statistics for Portugal – 2023 house purchases in Portugal were valued at 28 billion euros. €24.4 billion of this figure represents tax residents in Portugal, while €1.4 billion was EU residents and €2.2 other countries.

In the first quarter of 2024, buyers resident outside of Portugal represented 6.2% of the total number of house sales, which is 10.4% of the total value.

The table below shows the value in euros of house purchases by quarter from Q1 2023 to Q1 2024.

The figures demonstrate a decline in house purchases over the previous year, which is in line with the decrease in property prices.

The Algarve has been a popular location to buy property for the British for many years. Situated in the south of Portugal, with plenty of sun, sea and sand, many have chosen to make this tourist destination their home.

In 2023, the Algarve was the most popular location to buy property for foreigners, with 29.9% buying a home there, 17.5% buying in the north of Portugal and 15.6% in Greater Lisbon.

Although the highest, the Algarve figure dropped by 7% compared to 2022, and locations such as the north, centre, the Tagus Valley and the Alentejo saw slight increases. This demonstrates the interest foreign buyers have in the rest of Portugal, not just the Algarve.

Lisbon is also becoming the go-to destination for property buyers. In 2023, 33% of purchases in the Urban Rehabilitation Area (URA) (a regenerated zone in the capital) of Lisbon were by foreigners. The following table shows how this breaks down:

First, the attraction of the wide open spaces, fantastic beaches and slower pace of life come to mind. If you’re thinking of moving abroad these are some of the reasons to start a new life.

Add to this the attractive property prices and cheaper cost of living in Portugal compared to many other countries and you have plenty of reasons to consider moving to Portugal.

For example, in 2023, the average property purchase for foreigners from the EU in Portugal was €277,000, compared to €405,000 in countries outside the EU.

In terms of the cost of living, it is 28.2% cheaper to live in Portugal than the UK, with groceries, utilities and eating out all being much less.

Portugal has a mix of foreign buyers, with the Americans starting to have more of a presence. If you want an international lifestyle with friends from all over the world moving to Portugal could be for you. Not only will you find expat groups all over this vast country, you’ll discover the friendliness of the Portuguese people, who are happy to welcome foreigners.

If you’re looking for a property to buy in Portugal, iad Overseas can help. Our team of experts can help you find the right property, whether you’re searching for an apartment in Porto, a cottage in an undiscovered inland village or a villa by the sea on the Algarve.